A brewing political standoff over federal spending is throwing the future of millions of student loan borrowers into question. The Big Beautiful Bill, which includes the RAP proposal to overhaul income-driven repayment, is now at risk after high-profile public opposition, including recent criticism from Elon Musk.

As attention shifts from policy details to political theatrics, borrowers in the SAVE plan are left wondering what happens if the bill dies.

More than 7 million borrowers are currently in the SAVE plan or its associated administrative forbearance. The repayment structure, created through regulatory authority, is also under court challenge. The proposed GOP spending bill would have transitioned all SAVE borrowers into amended IBR, but if that doesn’t pass, the uncertainty will continue. 

Here’s how borrowers could be affected.

If The BBB Dies And The Court Strikes Down SAVE

If Congress fails to pass RAP and the courts later strike down the SAVE plan, the Department of Education would be forced to direct borrowers into one of the older IDR options: IBR, PAYE, or ICR. That would require large-scale communications, system updates, and a likely extension of administrative forbearance through 2026.

If rule-making is needed to address gaps, such as clarifying forgiveness timelines or recalculating payments, it could take another 6 to 12 months. In this scenario, the Department would likely give borrowers a temporary window to select a new plan. If they don’t, they likely will be defaulted into the 10-year Standard Plan, creating a risk of higher payments and delinquency.

Because the SAVE plan changed how discretionary income is calculated and provided interest coverage, borrowers moving to older plans would likely see higher monthly bills. It’s unclear whether the Department would be able to automatically place borrowers in the most affordable plan available.

You can see our full SAVE Plan Timeline Estimates here.

What About Other Student Loan Borrowers?

The current Big Beautiful Bill proposal would have transitioned all borrowers in IBR, PAYE, SAVE, and ICR into an amended version of IBR. It had all of the same rules of old-IBR, but eliminated the financial hardship requirement.

However, if the BBB dies, nothing would change on the student loan front. It would require other legislation to make changes.

So, borrowers would continue to make their payments as normal, and would not see any of the proposed changes.

There would still be a legal pause on student loan forgiveness related to PAYE and ICR, but that’s due to the ongoing SAVE plan litigation.

It’s important to note that student loan changes could still happen – they would just be a part of another bill in the future.

What Borrowers Should Expect If The BBB Dies

If the Big Beautiful Bill fails and the courts rules against SAVE, borrowers will need to re-select a repayment plan within a time period set by the Department of Education. The Department of Education may offer default placement in an IDR option, but the specifics remain unclear, and that is unlikely without some type of rulemaking.

Borrowers who were counting on SAVE’s $0 payment thresholds and interest protections will likely see higher balances and new monthly payments.

Administrative forbearance may continue into mid 2026 while legal and policy decisions are resolved. But borrowers should not assume their current status will last indefinitely. If the legal reasons supporting their current forbearance disappears, repayment could resume within months.

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